Every stage in the project management life cycle involves some form of procurement, whether it be identifying potential sources of products or servicers during the initiation phase or preparing final payment at the closure of a project. Every project is dependent upon the goods and services acquired through the procurement process, thus, needs to be effectively managed and understood by project managers. This paper will discuss a news article discussing problems regarding the accuracy of data in the procurement environment and its effect on the objectives of procurement management.
In "Bad Data - The Problem with Procurement," Daniel Teachey discusses a problem that plagues most organizations today - the accuracy and validity of product data. Organizations are trying to cut costs across the board, especially in today's economic downturn. Procurement managers are being tasked to find ways to minimize expenditures, in some instances by as much as 20%. To do this, the organization must have a better understanding of what they are purchasing and at what cost.
One of the major underlying problems is centered upon the data the organization maintains. Every organization collects data about its environment in order to conduct business, either in the form or customer data or product data. Every organization maintains data on the products or services they utilize while conducting business. However, each organization may maintain and catalog product data differently from another company. A standard method of maintaining data does not exist and is often developed by each company to meet its needs. Due to lack of standardization, errors and redundancy are common. Teachey provides the example of classifying a simple light bulb. The following table depicts multiples ways that a light bulb could be classified in a supply system.
Table 1 - Poor product description leads to poor classification and supply managementProductProduct...